Turns out that you can get government to give a lot more to charity if you invest in individual risky stocks.
If you donate stocks to charity, you don't have to pay any capital gains tax.
So you can do better if you diversify by buying individual stocks rather than buying an index fund.
If you buy an index fund, then your tax savings is only going to equal the average gain of the fund.
But if you buy individual risky stocks, then after 10 years some will have big gains and some will have big losses... Giving some amount of the big winners will maximize your tax savings...
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The problem with this plan is that it involves taking on a tremendous amount of non-market risk since 10 individual risky stocks are probably too small and unrepresentative of the overall market to be truly diversified. Further, there is 10 times the transaction costs as it invovlves buying and possibly selling 10 securities rather than one.
After 10 years, who knows what our tax code and the incentives contained therein, will look like?